Question

BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $128,400 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to its employee.

	Gross Pay through August 31					Gross Pay for September
a.		$	6,700				$	400
b.			2,150					2,250
c.			122,400					8,300

Assuming situation (a), prepare the employer’s September 30 journal entries to record the employer’s payroll taxes expense and its related liabilities.

1. Compute the payroll taxes expense. (Round your answers to 2 decimal places.)

2. Prepare the employer’s September 30 journal entries to record the employer’s payroll taxes expense and its related liabilities. (Round your answers to 2 decimal places.)

Answer 1

Pgo Answers 0 Total payroll faxes Expense :- mah FICA september Earnings subject to tax = $400(social security faces) FICA - medicare faves september Earrings subject to tax = 4400 FUTA taxes september Earnings subject to tar $7,000-$6,700 = $300 SUTA tares september Earnings subject to tax - $7,000 -6700 = $300 Tax amount = september Earning subject to fax x tax rate. Employer payroll (setember Earnings tarcs Tax rate Tax amccante subject to tar FICA- social security $400 6.at Byly 8 |FICA-medicare taxes 1.451 $5.8 FUTA tous $ 300 0.60) $1.8 SUTA teacs $300 5.401 -$16.2 Total payoll taxes. Expenses *48.6 taxes $4 400

2 D Journal Entry Ipate Debit (6) Eredila *48.6 particulos payroll tax Expenses sept|FICA-social scurity forces payable FICA-medicare faces payable FUTA - federal unemployment for people Suga-stato un complement tax payable 30 24.8 5.8 $18 $16.2